New PRs 'likely to eye private homes under $1m'

Private homes costing under $1 million may now draw keener interest among Singapore permanent residents (PRs) who have held their residency status for less than three years, and who are now blocked from buying HDB resale flats, property consultants say.

They added, however, that the shift to the private property segment by this group of buyers is unlikely to raise the number of private-home transactions significantly.

The HDB resale market recorded 25,094 transactions last year. The HDB said a fifth of resale flats are bought by PRs.

The government had announced this week that Singapore PR households with no Singapore-citizen owner will have to wait three years from the date of obtaining their PR status before they become eligible to buy a resale HDB flat.

Yesterday, the HDB clarified that if PR applicants want to buy such a flat together, both must meet the three-year wait-out period before a sale can be inked. The sale cannot go through if just one of two potential buyers of a flat meets the condition. In cases where there is only one buyer, at least one other PR essential occupier who forms a family unit with the buyer will have to have fulfilled the wait-out period.

Homes below $1 million will also make for a more manageable amount in additional buyers' stamp duty, so such properties will be in "high demand", noted Eugene Lim of ERA Realty.

Aside from the three-year wait-out period, the government also announced that resale flat buyers who take HDB loans will henceforth be able to use only up to 30 per cent of their gross monthly income to repay their loans, down from 35 per cent.

And they can take only up to 25 years to repay HDB housing loans, down from 30 years previously; bank loans taken to buy HDB flats must be paid up in 30 years, down from 35.

The government also announced an enhanced Special CPF Housing Grant (SHG), which will be extended to middle-income families earning up to $6,500 and buying four-room flats. Previously, the SHG was pitched only at families earning up to $2,250 and seeking to buy two-room and three-room flats.

In a Facebook posting yesterday, National Development Minister Khaw Boon Wan said the enhancement will cost the government at least $150 million more a year.

"This will raise our current housing grants for new flats (the Additional CPF Housing Grant and SHG) from about $290 million to over $440 million a year.

"The enhancement is not a trivial policy shift, but a significant one made after careful consideration."

Credit from Business Times - 29 August 2013

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

New PRs 'likely to eye private homes under $1m'

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